Editorial: Looking inward for economic recovery efforts

West African Development Outlook
Accra, Ghana - July 19, 2010: People walking on the big market in the capital of Ghana, Acrca

Efforts at economic recovery remain centred on increasing domestic production capacity, Finance Minister Ken Ofori-Atta notes.

This remark comes on the back of assurances that government is pursuing a robust growth strategy within the limited fiscal space when the Finance Minister presented the Mid-Year Fiscal Policy Review of the 2023 Budget Statement and Economic Policy.

It revised the 2023 fiscal framework to align with the IMF supported programme. Mr. Ofori-Atta said the year 2022 was his worst as the manager of Ghana’s public purse.

“The country was going through a dire period of economic uncertainties and despondency.”

A year on, the vision is clearer, the path to recovery is better set, and confidence in our economy is back, growing gradually, he added.

The minister said the country is currently making modest gains in turning the economy around. A combination of domestic imbalances and external shocks in 2022 led to macroeconomic challenges.

As inflation surges, rising prices keep the cost of living accelerating for Ghanaians. Investors began to lose confidence in the economy as the government grappled with liquidity challenges.

It is a fact that the economy has made some gains since Ghana reached the agreement with the IMF.

Fiscal austerity, high inflation and restrictive financial conditions will dampen private consumption and investment through 2023, clouding economic growth prospects. This has been evidenced by significant revisions to the country’s macroeconomic and fiscal frameworks.

Notable revisions include a decrease in overall Real GDP growth rate to 1.5 percent from 2.8 percent, and non-oil Real GDP growth rate to 1.5 percent from 3.0 percent for the year 2023.

Additionally, the end-period headline inflation is projected to reach 31.3 percent, compared to the previous estimate of 18.9 percent. The fiscal framework has also been adjusted, resulting in a revised primary balance deficit of 0.5 percent of GDP, in line with the IMF-supported PC-PEG fiscal consolidation path.

Despite the current slowdown, government is optimistic about economic recovery. Consequently, the Finance Minister did not ask Parliament for any additional money.

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